Fiat Chrysler targeted with UAW strike deadline

A UAW strike at Fiat Chrysler's automatic transmission operations in and near Kokomo, Ind., would have an immediate impact on the company's vehicle assembly plants.
UPDATED: 10/6/15 4:26 pm ET -- adds background

The UAW notified Fiat Chrysler that it will cancel contract extensions under which 40,000 unionized workers have been working since Sept. 14 and could go on strike.

The UAW set a “strike deadline” of 11:59 p.m. EDT Wednesday. However, it was unclear whether a potential strike would be against all FCA's U.S. factories or against strategic plants, such as the automaker’s three transmission factories and a neighboring casting plant in and near Kokomo, Ind.

Automotive News first learned of the notices from a worker at the Kokomo complex, where the notification letter from the union to the company was posted this morning.

The strike notice was also posted on the UAW's web site today.

“The company continues to work with the UAW in a constructive manner to reach a new agreement,” FCA said in a statement.

The union and the automaker have been “talking,” an FCA spokeswoman said Monday.

However, it was unclear whether any progress had been made after UAW members at Fiat Chrysler overwhelmingly rejected a tentative labor agreement reached Sept. 15.

The UAW has pulled its negotiators from the bargaining table, two people familiar with the talks told the Detroit Free Press today. 

Fiat Chrysler workers rejected a proposed deal last week that provided raises and lower bonus payments upon ratification, but the pact also failed to eliminate a controversial two-tier wage scale that has angered many UAW members.

The deal also lacked detailed future product and investment plans for Fiat Chrysler's U.S. plants, prompting worries among some rank and file workers about job security.

Some UAW members were also disappointed the deal failed to address alternative work schedules that require some hourly employees to work day and night shifts over certain, short periods.   

CEO Sergio Marchionne at the Fiat Chrysler transmission plant in Kokomo, Ind., in a February 2013 file photo. Photo credit: BLOOMBERG

Strategic action

A UAW source said strategic strikes could be used to increase bargaining pressure on FCA to better the terms of the rejected contract.

While a general strike could potentially shut down all 40,000 hourly workers at FCA, a strategic action could save UAW expenses from its strike fund.

A strike only at Kokomo would shut down about 75 percent of profitable Jeep and Ram pickup production, said Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research in Ann Arbor, Mich.

FCA workers not on strike but idled by a shutdown at a key component plant such as Kokomo would be eligible for unemployment insurance, rather than the $200 per week from the union's strike fund.

David Barkholz contributed to this story.

You can reach Larry P. Vellequette at lvellequette@autonews.com -- Follow Larry P. on Twitter: https://twitter.com/LarryVellequett

25

Shares

Newsletters